{"id":112189,"date":"2024-06-05T21:54:46","date_gmt":"2024-06-05T16:24:46","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=editorial-analysis&#038;p=112189"},"modified":"2024-06-06T16:17:05","modified_gmt":"2024-06-06T10:47:05","slug":"export-of-services-to-drive-indias-economic-growth","status":"publish","type":"editorial-analysis","link":"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/export-of-services-to-drive-indias-economic-growth","title":{"rendered":"Focus on the Export of Services to Drive India&#8217;s Economic Growth"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">To drive growth, India could focus on the<\/span><b> export of services <\/b><span style=\"font-weight: 400;\">provided by its <\/span><b>well-educated and skilled population.<\/b><\/p>\n<table style=\"width: 100.198%;\">\n<tbody>\n<tr>\n<th style=\"width: 100%; border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\"><span style=\"color: #000000;\"><b>Relevancy for Prelims:<\/b><span style=\"font-weight: 400;\"> Remote Services, Agnikul 3D Printed Rocket, etc.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><b>Relevancy for Mains: <\/b><span style=\"font-weight: 400;\">Significance of Service Sector in India, Job Creation by Leveraging Service Sector in India etc.<\/span><\/span><\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span style=\"font-size: 18pt;\"><strong>Focus on the Export of Services<\/strong><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Well-Educated and Skilled Population:<\/b><span style=\"font-weight: 400;\"> Though this cohort represents a <\/span><b>small fraction of the total population,<\/b><span style=\"font-weight: 400;\"> it still numbers in the tens of millions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Build on India&#8217;s Strengths<\/b><span style=\"font-weight: 400;\">: The country is already well known for its <\/span><b>role in the global software industry,<\/b><span style=\"font-weight: 400;\"> and now it exports many other services, too, accounting for <\/span><b>over 5% of the world&#8217;s services exports<\/b><span style=\"font-weight: 400;\"> while its goods exports account for less than 2%.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Employing Indian Talent:<\/b><span style=\"font-weight: 400;\"> Multinational firms from<\/span><b> Goldman Sachs to Rolls-Royce<\/b><span style=\"font-weight: 400;\">-are hiring talented Indian graduates for India-based <\/span><b>global capability centres (GCCs), <\/b><span style=\"font-weight: 400;\">where engineers, architects, consultants and lawyers create designs, contracts and content (and software) that are <\/span><b>embedded in manufactured goods and services<\/b><span style=\"font-weight: 400;\"> sold globally.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">These centres already account for over 50% of all GCCs globally, employing <\/span><b>1.66 million Indians and generating $46 billion in annual revenues<\/b><span style=\"font-weight: 400;\"> as of March 2023.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Course<\/a><\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Rise in Remote Services:<\/b><span style=\"font-weight: 400;\"> Following the <\/span><b>pandemic-induced changes<\/b><span style=\"font-weight: 400;\"> in work habits, and given improvements in communications technology, Indians also have started providing a much wider range of remote services, including <\/span><b>consulting, telemedicine and even yoga instruction.<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Once a <\/span><b>service goes virtual<\/b><span style=\"font-weight: 400;\">, it matters little whether the provider is ten miles or 10,000 miles away.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">An Indian consultant in Hyderabad can now make a presentation to a client in Seattle on behalf of a team whose <\/span><b>members span almost every continent<\/b><span style=\"font-weight: 400;\">. She not only is well trained and fluent in English; she also <\/span><b>costs one-fourth<\/b><span style=\"font-weight: 400;\"> of her US counterpart.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Growth in Indian manufacturing: Manufacturing<\/b><span style=\"font-weight: 400;\"> has also benefited from these changes, but this has happened in precisely those areas where<\/span><b> engineering, innovation and design<\/b><span style=\"font-weight: 400;\"> matter more than just the manufacturing process itself.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Hence<\/span><b>, Agnikul, a Chennai-based firm<\/b><span style=\"font-weight: 400;\"> working to launch small satellites into space, has dispensed entirely with manufacturing supply chains by <\/span><b>3D printing its customized rockets<\/b><span style=\"font-weight: 400;\"> in its own facility.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">And <\/span><b>Tilfi,<\/b><span style=\"font-weight: 400;\"> which sells<\/span><b> hand-woven Banarasi silk sarees <\/b><span style=\"font-weight: 400;\">globally through its website, employs trained designers to create fresh fashions for <\/span><b>traditional craftsmen, <\/b><span style=\"font-weight: 400;\">who in turn are encouraged to embrace innovation.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">It would seem to be a no-brainer that<\/span><b> India should build on its strength: <\/b><span style=\"font-weight: 400;\">millions of high- skilled, creative, educated workers, many of whom speak English. Unfortunately, it&#8217;s running out of such workers.<\/span><\/p>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/store.pw.live\/govt-entrance-exams\/upsc-books?utm_source=SEO&#038;utm_medium=PW+Live&#038;utm_campaign=UPSC+CSE+Books\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Check Out UPSC CSE Books From PW Store<\/span><\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><strong>India Faces a Crisis of Joblessness Today<\/strong><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lack of Access to High-Quality Education:<\/b><span style=\"font-weight: 400;\"> While India <\/span><b>graduates 1.5 million engineers per year, <\/b><span style=\"font-weight: 400;\">only a minority attend institutions that impart the<\/span><b> high-quality education<\/b><span style=\"font-weight: 400;\"> that is in demand at a GCC or a company like Agnikul.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lack of Work-Skill Balance:<\/b><span style=\"font-weight: 400;\"> Wheebox, a work-skill assessment company, estimates that<\/span><b> half of all graduates are unemployable<\/b><span style=\"font-weight: 400;\">.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Some of these graduates need only a little <\/span><b>remedial educatio<\/b><span style=\"font-weight: 400;\">n to be brought up to speed. But for many Indians, the educational deficiencies run much deeper. While nearly all Indian children start school, <\/span><b>fewer than one-quarter can read<\/b><span style=\"font-weight: 400;\"> at a second-grade level by the time they reach third grade.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Dropping Out of Schools:<\/b><span style=\"font-weight: 400;\"> The further behind the stragglers fall, the less sense it makes to stay in school. Many ultimately drop out, <\/span><b>incapable of anything but unskilled work.<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">No wonder the <\/span><b>share of workers in agriculture is growing<\/b><span style=\"font-weight: 400;\"> in India today, contrary to the usual path for fast-growing countries.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><strong>Way Forward<\/strong><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Job Creation:<\/b><span style=\"font-weight: 400;\"> Apart from expanding the<\/span><b> creative high- skilled sector<\/b><span style=\"font-weight: 400;\">, India must create jobs that are <\/span><b>broadly targeted at the skills people have.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Improve Education and Skills:<\/b><span style=\"font-weight: 400;\"> It also needs to<\/span><b> improve education and skills<\/b><span style=\"font-weight: 400;\">, both in the short term and over the long term, so that Indian workers can do the jobs of the future.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Job Creation for Educated Human Resources: <\/b><span style=\"font-weight: 400;\">Sensible reforms would recognize that the solutions to both challenges are related. For example, a study shows that if a <\/span><b>government-run daycare <\/b><span style=\"font-weight: 400;\">employs a part- time worker, perhaps a high-school educated mother, <\/span><b>children&#8217;s learning improves <\/b><span style=\"font-weight: 400;\">significantly.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">With <\/span><b>more than one million such daycares<\/b><span style=\"font-weight: 400;\"> in India today, that is potentially one million more workers set on the road to longer-term employability.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Vocational Training:<\/b><span style=\"font-weight: 400;\"> Similarly, public funding for <\/span><b>vocational and apprenticeship programmes <\/b><span style=\"font-weight: 400;\">that allow students to cross the threshold of employability could convert millions into productive workers.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">There is <\/span><b>no shortage of demand <\/b><span style=\"font-weight: 400;\">for health- care providers, plumbers, carpenters, and electricians.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Initiating Reforms:<\/b><span style=\"font-weight: 400;\"> When coupled with reforms to support businesses-especially <\/span><b>small- and medium-size firms in labour-intensive sectors<\/b><span style=\"font-weight: 400;\"> like garments, hospitality and tourism-India could put many more people to work.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">But this will require <\/span><b>carefully designed programmes<\/b><span style=\"font-weight: 400;\">, funded in part by reallocating the tens of billions of dollars now being promised as <\/span><b>subsidies to large manufacturers.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Long Term Approach:<\/b><span style=\"font-weight: 400;\"> In the longer run, there is no alternative to increasing the number and<\/span><b> quality of childcare, education and health-care institutions<\/b><span style=\"font-weight: 400;\"> to capitalize on India&#8217;s greatest asset: its people.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The currently <\/span><b>low level of public spending <\/b><span style=\"font-weight: 400;\">in these areas should be seen as an opportunity, because it means that there is plenty of room to grow.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Leveraging Diaspora: <\/b><span style=\"font-weight: 400;\">India also can draw on its <\/span><b>vast diaspora<\/b><span style=\"font-weight: 400;\"> to seed some of the new higher education and research institutions it must create to expand the numbers of the highly skilled.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">When people have the<\/span><b> right skills<\/b><span style=\"font-weight: 400;\">, and engage with idea-producing institutions, <\/span><b>entrepreneurship will create jobs<\/b><span style=\"font-weight: 400;\"> in the most unlikely of places. It wasn&#8217;t the government, after all, that created India&#8217;s software industry.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Overcoming Protectionism:<\/b><span style=\"font-weight: 400;\"> Could growing<\/span><b> protectionism impede this path<\/b><span style=\"font-weight: 400;\">? Not necessarily, because high-end services exports are hard to stop at the border if<\/span><b> delivered virtually.<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Moreover, industrialized countries also sell such services globally (think of US management consultants and venture capitalists), which may mean that protectionism in these sectors will be<\/span><b> less attractive.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">And, given their<\/span><b> ageing populations,<\/b><span style=\"font-weight: 400;\"> industrialized countries have much to gain from <\/span><b>India-provided services<\/b><span style=\"font-weight: 400;\"> like telemedicine, since these will reduce the need to attract and assimilate foreign doctors and nurses.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc\/pw-only-ias?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Classes<\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><strong>Conclusion<\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">India must address its <\/span><b>education and job crisis<\/b><span style=\"font-weight: 400;\"> by focusing on<\/span><b> skills training, reforms, and leveraging its diaspora<\/b><span style=\"font-weight: 400;\"> for sustainable growth.<\/span><\/p>\n<table style=\"width: 100.199%;\">\n<tbody>\n<tr>\n<th style=\"border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle; width: 100%;\"><span style=\"color: #000000;\"><b>Mains Question:<\/b><\/span><\/p>\n<p><span style=\"color: #000000;\"><b>GS-03:<\/b><span style=\"font-weight: 400;\"> Effects of liberalisation on the economy, changes in industrial policy and their effects on industrial growth.\u00a0<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><a style=\"color: #000000;\" href=\"https:\/\/pwonlyias.com\/stage\/mains-answer-writing\/india-has-the-potential-to-become-a-major-player-in-global-services-exports-analyze-the-factors-that-can-help-india-realize-this-potential-and-the-steps-needed-to-overcome-the-existing-challenges-2\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Q. India has the potential to become a major player in global services exports. Analyze the factors that can help India realize this potential and the steps needed to overcome the existing challenges. \u00a0 (15 Marks, 250 Words)<\/span><\/a><span style=\"font-weight: 400;\">\u00a0<\/span><\/span><\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>\u00a0<\/p>\n<table style=\"width: 100.126%;\">\n<tbody>\n<tr>\n<td style=\"width: 145.628%; text-align: center; border-style: solid; border-color: #000000;\" colspan=\"2\"><span style=\"font-size: 18pt;\"><b>Must Read<\/b><\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 53.7486%; text-align: center; border-style: solid; border-color: #000000;\"><a href=\"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">UPSC Daily Editorials<\/span><\/a><\/td>\n<td style=\"width: 91.8794%; text-align: center; border-style: solid; border-color: #000000;\"><a href=\"https:\/\/pwonlyias.com\/stage\/daily-current-affairs\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">UPSC Daily Current Affairs<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 53.7486%; 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